Organisations are more likely to focus on risk protection than innovation and growth.
A new report indicates that the pressure to meet industry standards could compromise long term success as Financial Services organisations are more likely to focus on risk protection than innovation and growth.
Whilst also revealing that meeting customer expectations around trust and quality of service is dominating boardroom debates – the pressure is on IT departments to deliver creative IT solutions that will solve Big Data demands whilst meeting customer expectations.
This independent industry report, commissioned by SAP, of 100 financial services companies found that improving customer service was the number one business priority by 65% of respondents. This was followed by increasing sales and revenue (63%), building customer trust (61%) and regulatory compliance (61%).
Jane Tweddle, Financial Service Principal SAP UK and Ireland, said: "There is a fundamental need to meet regulatory requirements but at the same time the sector needs to find a way to grasp Big Data. Currently the industry is failing to maximise the potential for revenue growth and improved customer interaction by utilising the data at its disposal."
Increase in customer complaints
Increased data levels are causing a slow down for over a third of financial services businesses’ IT systems. Moreover, just under two thirds of companies surveyed said that they have more data than they can actually analyse or act upon.
The barrier to developing in-depth customer understanding and business insight has led to 29% of companies receiving an increase in customer complaints, last year alone. It’s no surprise then that two thirds of companies surveyed said that their sector is under pressure to provide IT innovation which will improve customer retention; dividing the investment between customer facing (61%) and back office (52%).
Increased focus on the need to meet regulation and protect against risk are common barriers preventing innovative IT investment. 68% of businesses reported being under more regulatory pressure than they were 12 months ago, leading to 6 out of 10 companies surveyed saying they are more concerned with protecting themselves against risk than they are in investing to innovate and grow.
"Not only is time wasted collecting data which then has to be stored safely and protected at a further cost, customers are now recognising the service they should be getting is one that’s directly appropriate and convenient to them. Failing to meet this requirement will leave customers with only one choice: to look towards your competitors for a better service," Tweddle concludes.
Other key findings
· 60% of financial services firms say they are more focused on protecting themselves against risk
than they are in investing to innovate and grow (40%);
· 68% of respondents are under more regulatory pressure than they were 12 months ago;
· Financial Services firms are only able to act upon 39% of the customer data they have;
· IT is seen as a significant core differentiator at Board level by 46% of companies in the sector;
· Improving customer trust is rated as a priority for 3 out of 5 firms in the sector;
· 65% of firms in the sector say their customers are more demanding of a personal service than they were two years ago.
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